Some companies are hesitant to develop an “ultra-price package,” but it may be key to maximizing profits.
There is always a dance going on between a company and a customer.
Creating perceived value is centered on understanding the needs of customers and the benefits they want.
Companies often develop different “price points” for various levels of products and services.
So what is the ultra-price package?
An ultra-price package is the absolute highest price offering you and your company can assemble. It is loaded up with everything imaginable. The absolute price point of this package must be much higher than you would ever expect a customer to accept.
Yes, that’s right. Your ultra-price package is your most expensive package and the vast majority of customers are not going to want it.
But, you need to have it because of these three reasons:
1. Your next lower tier of pricing will look more appealing.
The pricing right below your ultra-price package will look like a bargain, but in reality it is an accurate price/value relationship for what you are offering. Your customer will be less likely to ask for a discount, because they believe they are already getting a good deal.
Retailers are very skilled at this. For example, they may place a luxury purse on the middle of a display, and then surround it with lower-priced purses. The lower-priced purses are still profitable for the retailer, and will likely sell at a faster rate than they would if they were displayed without the luxury purse.
The retailer knows that the most profit is to be made in selling a higher volume of units at the standard pricing.
2. The ultra-price package can boost the price confidence of the sales team.
Sadly, some salespeople simply do not believe in the standard price of their product or service.
Because of this, they are quick to discount in order to close a sale. If a company has an ultra-price package, it can aid in helping salespeople feel more confident about the price points below that package.
As I have already noted, the vast majority of sales will happen at the “regular” price. This is okay, of course, as long as salespeople aren’t discounting this regular price. They will be less likely to discount because they do indeed see this regular price as a good value — when compared to the ultra-price package.
3. Some customers actually will want the “ultra-price package.”
This is a win-win for you and your company, because obviously you have increased your profits. Key to this point is you must be able to deliver on all the promises attached to this ultra-price package. The customers who purchase it will see the value they are getting for the price they are paying.
Maybe this is the first time you have considered the power of the ultra-price package. If so, I encourage you to put various pricing tiers in place, with the goal of increasing the profit you are making on the standard price point. You will be less likely to discount at this level.
I talk about the ultra-price package and many other specific selling techniques in my new book, “High-Profit Selling: Win the Sale Without Compromising on Price.” You can stand apart as an exceptional salesperson who thoroughly understands what it takes to secure profits.
Copyright 2012, Mark Hunter “The Sales Hunter.” Sales Motivation Blog.